8 | AUGUST 2018 | Claims Magazine | PropertyCasualty360.com
Flames, floods engulf
Florida homes in
adjuster’s $14M plot
By Dennis Jay
ASouth Florida public adjuster, Jorge Fausto Espinosa, recruited ozens of homeowners to burn
or flood their homes for about $14 million in inflated insurance claims. He
earned a percentage of the insurance payouts he lined up for client homeowners
via his firm, Nationwide Adjusters. The
bigger the damage, the fatter his insurance take — around 30% of the payout.
He paid a squadron of marketers to
recruit homeowners. Fires were set and
pipes clogged, all to seem like an innocent home accident. Espinosa then
pushed the insurers hard for overblown
Free kitchens lured homeowners
Homeowners gladly signed onboard, encouraged by the lure of a free kitchen or
home remodeling, all paid for by their
Some claims were rigged fires or water damage, depending on which would
net the largest claim payout. The arsons
resembled electrical, kitchen and vehicle
fires in homes or garages. Water damage
looked like faulty water lines or clogged
sewer lines. Espinosa and a crony stuffed
small children’s dolls into one drain, then
demanded more than $200,000 for water
damage to the kitchen.
In another case, Espinosa placed bed
sheets, stuffed animals and clothing under a Christmas tree and ignited the pile
with a propane torch. “Wow! Look at
my masterpiece!” Espinoza told a cohort
while watching the fire spread. The fire
earned a payout of more than $317,000.
In one case, Espinosa went to a grocery
store, bought a frying pan, lard and cro-
quettes. He put half of the lard in a frying
pan and then used a paper towel to spread
lard on the kitchen cabinets. He told the
homeowner to wait a few days, cook cro-
quettes and leave the stove on. But a tem-
perature switch on the oven prevented
the fire. Espinosa then returned, bought a
new stove, installed it and told the home-
owner the same thing.
This time it worked. The insurer paid
Rigged power strips,
In yet other cases, an electrician rigged
power strips to look like they shorted and
A homeowner in South Miami-Dade
had Esponosa’s people loosen a pipe under the sink of the master bathroom, then
let the water run. To speed up the damage, the men also used a garden hose.
Espinosa and a trusted employee arrived at Angela Frye’s home, where a
small kitchen fire had occurred the day
before. She’d collect much more if just
one tile was also damaged, they said. So
Espinosa smashed the floor with a frying
pan, then a yellow hammer. The actual
damages amounted to about $9,000, although Espinosa enlarged the claim into
a $70,000 insurance haul.
Espinosa spread the damage claims
among numerous insurers no single insurer would easily see a pattern worth
investigating. At least 14 insurers were
bilked by more than 50 inflated claims.
The state CFO, fire marshal and other
agencies launched two full-scale probes
called Operation Flames and Flood l and
ll. Insurers also provided plenty of evidence and investigative firepower and Espinosa’s ring was finally cracked.
While languishing in prison after his
arrest, he plotted with a fellow inmate to
hire a hitman and rub out the prosecutor.
The murder plot fizzled. Still, Espinosa
was sentenced to 20 years in state prison
for numerous major charges, including
racketeering and insurance fraud.
Dennis Jay (dennisjay@insurancefraud.
org) is the executive director of the
Coalition Against Insurance Fraud.